Why were insiders cashing out ?

NYSE volumes have shrunk significantly, running as low as 30% below average, which could mean a few things. Whatever the reason, higher highs on low volume is generally not a positive sign.

There is one indicator flashing danger at the moment. We should be aware of it--the insider sell/buy ratio, which last week saw wild numbers on the sell side at 434:1.  For the week, $1.7 million worth of stock was bought in sixteen separate purchases, while 126 sales totaled just under $750 million.

Why were insiders cashing out in such manic fashion? Do they know something that we don't know? 

Many of the stock market experts continue to be extremely bullish, and you are hearing again the tired and bogus line that “This time it`s different”.

Don`t buy it, and be on top of reducing equity allocations or have a plan on the downside so you don`t get caught in the next down -50% market cycle.

Extreme caution ! Bears in charge if S&P 1270 is broken

The Nasdaq did climb back to 2750, then fell steeply on last Friday. We have been warning for an imminent downturn, as indicated on the charts.
This could well be the start of a multi-month slide. We have come a long way since last August, but we need to remember that markets never go up in straight line.

The S&P touched the 1300 level, then turned down. The uptrend is still intact, so there is room for some rebound this week. But the upcoming bearish period is likely to take the S&P down in February, and break the uptrend that has been in place since last August. In this week, 1270 area acts as the key support. Any fall below 1270 would confirm this scenario. Then the first target would become 1180.

Despite an overbought market condition, rising oil prices, and Middle East governments in chaos, stocks rallied to new highs. The threats to the political stability of Egypt, Jordan, Yemen and even Saudi Arabia were ignored as investors focused instead on an improving U.S. economy.

Despite the DJIA crossing 12000 and S&P 500 breaching 1300 this week, Many indices in the U.S., as well as globally have failed to follow the DJIA and S&P 500 over the last week, and I see this as a major warning that a pullback or correction is near. In addition to the non-confirmations by many indices, I am also seeing plenty of divergences with respect to market internal data. At the same time, price momentum is overbought on a daily and weekly basis, and market sentiment is at extremely bullish camp. This, to me, all adds up to a 5% to 10% decline in the major indices over the next month or two.

With the exception of very quick bullish trades, I suggest extreme caution. When this market turns south, there will not be enough room to provide those seeking the exits.